Sotheby's Plans Its First NFT Auction With Artist Pak and Nifty Gateway

Top auction house Sotheby’s, established in 1744 in London, has announced its first auction of non-fungible token (NFT)-based digital artworks, created by anonymous artist Pak, that “scrutinizes our understanding of value.”

Sotheby’s announced Monday “The Fungible” Collection by Pak will be taking place April 12-14 on Nifty Gateway, an NFT marketplace owned by Gemini, the cryptocurrency exchange founded by the Winklevoss brothers.

The creator of Archillect, an AI built to discover and share stimulating visual media, Pak has been active in digital art for over two decades. In December Pak was the first to earn $1 million for NFT art.

The auction house said the sale of Pak’s “Fungible Cubes” will be available at the starting price of $500 and collectors will be able to purchase as many cubes as they wish. The buyers of the fungible cubes will receive an NFT containing Pak’s artwork.

The collection up for auction includes individual NFTs, each representing sets of A Cube (1), Five Cubes (5), Ten Cubes (10), Twenty Cubes (20), Fifty Cubes (50), Hundred Cubes (100), Five Hundred Cubes (500), Thousand Cubes (1,000).

NFTs have fast become a craze with millions of dollars being spent on rare or desirable digital artworks. Last month, a piece of digital artwork or NFT by crypto artist Beeple was sold for a record $69.3 million by Sotheby’s rival auction house Christie’s.

Read more: What Are NFTs and How Do They Work?

In March, Sotheby’s CEO Charles Stewart told CNBC NFTs have “staying power." The auction house decided to hold its first NFT art sale with Pak because it wanted to work with one of "the most established artists" in the space.

Pak’s The Fungible Collection will “challenge us to rethink what we know about digital art and ownership,” and “scrutinizes our understanding of value,” said Sotheby’s.

People may be able to right click save as a "jpeg" but how would they save as a digital performance?Pak

“I see this collection as the first digitally native mindset of works that's presented to the traditional art world through a global auction house,” said Pak in a statement released by Sotheby’s.

“With this kind of a scale, I expect it to play a major cultural role in telling the narrative of the digital world to the traditional world in terms of the medium definition and value creation. People may be able to right click save as a 'jpeg' but how would they save as a digital performance?”

For artists, it has been a challenging time, with many unable to resume activity due to the COVID-19 pandemic. In response, NFTs have seen growth by creating opportunities for struggling artists and their fans.

NFTs are cryptographic assets that can have variable features. They have been used to represent a wide range of unique tangible and intangible items, from art to collectible sports cards to virtual real estate and even digital sneakers.

According to data from Nonfungible.com, a site tracking NFT marketplaces, the industry had a market capitalization of $338 million at the end of 2020.